Ringgit heads for quarterly gain as oil rallies

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KUALA LUMPUR (Sept 29): Ringgit heads for a third quarterly advance, longest winning streak since 2011, as energy prices show signs of recovery.

* USD/MYR falls 1.5% in 3Q to 4.2270; weakens 0.1% Friday

** Support 4.1825, 4.1733, 4.1442; resistance 4.2505, 4.2579, 4.2771

* Brent crude jumps 20% in 3Q; Bloomberg Dollar Spot Index drops 1.9%

* Trading in USD/MYR is likely to remain rangebound, reflecting stalemate between speculators and BNM, which has been a dominant theme this year, says Mingze Wu, a currency trader at INTL FCStone in Singapore

** Sees resistance for pair around 4.250, support at 4.20

* Maybank cautions on risks of a rebound in USD/MYR in near term, with daily momentum having turned mildly bullish while stochastics are rising from oversold conditions, analysts led by Saktiandi Supaat wrote in note Thursday

** Support remains at 4.20 and 4.1720

* 10-year govt bond yield climbed 6bps Thursday to 3.95%

* Domestic Islamic investors such as pension funds were main participants in Thursday’s auction of sovereign Shariah- compliant notes, Winson Phoon, a fixed-income analyst at Maybank Investment Bank, wrote in note Thursday

** Positive bond sentiment seen earlier in the month has waned due to hawkish rhetoric from Fed and rebound in USD

* Data next week include August trade balance and end-Sept. FX reserves